Twenty years ago, a partner and I founded a small software company and we built custom desktop database apps for local clients. We hired a couple of employees to do coding for us and after a few years began to wonder about the same things that you are thinking about now.
We thought we were at a crossroads like the one that you are at: if you can afford to turn down custom app development work or consulting work for the sake of building a killer product, then you can conquer the world... IF your product really does succeed, and IF you don't run out of money first. It sounds exciting, being able to build your product and not having to deal with the details of hiring and supervising employees, marketing to gain new clients, etc. Of course, you'll have to eventually build a marketing program around your product(s) in order for them to be successful.
The other choice that you could pursue would be to put aside (or at least postpone) your dream of building your product(s), grit your teeth and face up to the task of building a company with employees and marketing needs and earn profits based on the markup on your employees' work. If done well, that can produce a viable consulting/app dev business that has some enterprise value a few years down the road.
At the time, twenty years ago, my partner and I decided to forego the product development route. Around the same time, the nation experienced a recession and our industry and our local economy were especially impacted. After a while, we closed the company and I went to work for a commercial software company.
To be honest, I believe that the dream of building products that take the market by storm and free you from having to do the day to day work of hiring, supervising and marketing is just wishful thinking for most people. Although it isn't as romantic, building a business by well-grounded assessments and observations, sound strategic planning, detail-oriented management and hard work, leading and building a great workforce is (to my biased point of view) a more likely path to success.
It may take longer than the seemingly overnight riches of an insanely successful product, but there are more examples of success based upon building good companies than upon building killer products.
My two cents' worth, anyway.